22 Weeks to your regulatory examination deadline
There are only 22 weeks and a couple of days before the deadline for completion of the RE1 (key individual for category I, II, IIA, III and IV) and RE5 (representatives of categories I, II, IIA, III and IV excluding representatives for subcategories 1.1 a
Is there enough time for all industry stakeholders to meet this deadline? Although the FSB has yet to issue official examinations statistics we recently stumbled upon a slideshow presentation titled Regulatory Examination 2011 (available at http://www.fsb.co.za/). The presentation was delivered by Stephanie Mackenzie at the 2011 FAIS Conference and offers some insight into examination progress to 17 November 2011. Among the valuable statistics are the FSB estimates of stakeholders in the domestic industry. They say there are 10, 983 authorised financial services providers, 12, 863 key individuals and 122, 546 representatives.
Thousands still to sit exams
At 17 November 2011 Mackenzie said 47.45% of the key individual and 38.57% of the representative populations had ‘written’ the exam. Using the FSB population estimates and assuming a pass rate of 60% (which, based on the basic graphic included in the presentation, we believe to be fair) we reckon approximately 9, 200 key individuals and 94, 200 representatives shave yet to pass RE. In other words exam seats will be hard to come by as the 30 June deadline approaches.
The presentation included a number of observations. As you know the pass market for the Level I RE have been set at 65%. It emerges that the majority of key individuals and representatives who passed the exam achieved scores of between 71% and 80%, while the majority who failed were in the 51% to 60% bracket. These statistics suggest that a lowering of the pass mark to 50% would ensure a near 100% exam success rate. But the FSB has already addressed the pass hurdle in FAIS Circular 7 of 2011.
“The FSB has received continuous requests from industry to lower the pass mark from 65% to 50%,” they say. “The lowering of the pass mark will defeat the purpose of the examination which is to ensure that persons rendering financial services to clients know what is expected of them under the Act and the Codes.” They argue that the exam process would be rendered meaningless were standards lowered simply to bolster the pass mark. If only the Department of Education were listening!
Making the grade
During her presentation Mackenzie noted that “there was an increase in the pass rate since roll-out of the exams at an average of 3% per month for both exams.” Preparation is the recipe for success and advisers were urged to take a systematic and structured approach in the run up to their exam.
Moonstone issued some comment on the Regulatory Examination 2011 presentation. After commenting on the lack of accurate pass rate statistics they applauded the ongoing improvement in results. They believe the pass rate will strengthen further thanks to candidates preparing more thoroughly, growing familiarity with the format and nature of the examinations and improvements to study material and examination aids. Although the evidence suggests delaying your exam date may improve your chances of passing, they warned against waiting until the last minute!
Cancellations among smaller financial services providers
“There was a serious increase in cancellations from small financial services providers and individuals since July 2011, and poor registration figures since,” observed Mackenzie. Moonstone believes the spike in cancellations could be directly linked to the extended examination deadline. Smaller FSPs and individuals may have opted out of their first examination bookings in order to prepare more thoroughly. “What motivated the candidates to do this is not important,” comments Moonstone. What is important is that these individuals commit to a later date and make their bookings before the big product and broker houses fill up all the available seats.
FAnews would like to take this opportunity to wish all key individuals and representatives the best of luck with completing the Level I RE requirement. Book your exam seat early, prepare thoroughly and we’re sure you’ll succeed by the 30 June 2012 deadline.
Editor’s thoughts: There are only 22 weeks before the 30 June 2011 FAIS Level I RE deadline. Judging by the November 2011 numbers there are still thousands of individuals who must sit the exam. Are you concerned that there will be a shortage of exam seats as the deadline draws near? Add your comment below, or send it to [email protected]
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